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May 20, 2009
Four debt relief companies are the target of enforecement action taken by Texas Attorney General Greg Abbott’s office.
Dallas area based BC Credit Solutions allegedly told clients that they would have to pay off full balances and interest in a Chapter 13 bankruptcy. Provisions of the U.S. Bankruptcy Code allows the amount of money owed to unsecured creditors to be reduced.
LH Financial Service, also based in the Dallas area, allegedly told clients that they would lose their home, investment accounts and other large assets in bankruptcy. Exempt property in the state of Texas includes the homestead and up to $1 million in retirement savings.
Louisville, Kentucky based DebtORSolution allegedly claimed that filing a Chapter 7 bankruptcy would result in an auction of all your property, when in practice federal and state bankruptcy exemptions allow the debtor to keep most of thier property.
Scottsdale, Arizona based Four Peaks Financial Services allegedly told customers that their debt settlement program “allows your credit score to dramatically improve,” when in fact it can have a negative impact on a debtors’ credit rating.
May 6, 2009
Just hours before the Hill Country Galleria was set to go up at the Travis County foreclosure auction, the shopping center filed for Chapter 11 bankruptcy protection.
The bankruptcy filing stops the foreclosure process on the property and will give the developers of the one and a half year old mall on Highway 71 in Bee Cave time to refinance a construction loan that had expired.
Jill Rowe, a local retail broker told the Austin American Statesman that it is not surprising that Opus chose the bankruptcy route, given that the company was unable to convert its construction loan to permanent financing and the project’s layers of lenders. Even if leasing and other aspects of the project are on track, Rowe said, “just the short-term note coming due creates an unworkable situation.”
April 23, 2009
A free workshop on foreclosure prevention will be held in Arlington Saturday. It will begin at 9 a.m. at the Junior League of Arlington’s Center for Community Service off Pioneer Parkway and Park Springs Boulevard.
There will be a presentation on foreclosure prevention along with a question and answer session. Participants will also have a chance to meet with mortgage service providers and housing counselors.
The workshop is being held by the Tarrant County Housing Partership in cooperation with the HOPE Partnership. Walk-ins are welcome, but if you plan to attend organizers ask that you register by calling 817-924-5091 or email info@tchp.net.
April 17, 2009
Foreclosure filings rose to a record high in the Dallas/Fort Worth Metroplex as moratoriums imposed by lenders are ending.
A report in the Dallas Morning News states that over 5,500 homes face sale on courthouse steps across the area in May.
Experts tie the spike in foreclosures to the end of moratoriums at banks following the release of President Obama’s housing recovery plans.
The Treasury Department announced yesterday that 6 mortgage lenders would receive up to $10 billion to help troubled homeowners.
That help may come too late for some in the area. According to Foreclosure Listing Service of Addison, there have been 24,000 homes foreclosed on in Dallas, Tarrant, Denton and Collin counties since January. That number is up 11 percent over the same period in 2008.
March 30, 2009
A Richardson-based debt settlement company faces a lawsuit, filed last week by Texas Attorney General Greg Abbott, which alleges that it defrauded Texas consumers by failing to negotiate settlements with the customers’ creditors as promised.
A story in the Dallas Morning News says that Abbott’s office received 140 complaints against Credit Solutions of America in the past two years. The Better Business Bureau, which gave the company an “F” says that they have received more than 1,600 complaints against the firm in the last three years.
The lawsuit seeks an injunction against Credit Solutions to prevent them from “continuing to unlawfully promise services which it does not deliver.”
A spokesperson for Credit Solutions told Pamela Yip of the Dallas Morning News that the company “works diligently to resolve all complaints with the Better Business Bureau, and to our knowledge any BBB complaints referred to by the attorney general of Texas have been appropriately addressed.”
The company’s mouthpiece also said that they looked forward to working out an “acceptable resolution” with the Abbott and his team.
March 26, 2009
The Teacher Retirement System (TRS) of Texas has asked to be the lead plaintiff in a federal class-action lawsuit against Bank of America Corp.
Plaintiffs allege in the lawsuit, filed in January, that Bank of America made “untrue statements” and withheld crucial information from shareholders during its acquisition of Merrill Lynch & Co. Inc. last year.
The lawsuit marks the first time that the Texas teachers fund has ever sought lead status, which gives the fund managing control of the case including choosing which attorneys actively oversee the case.
Four other funds, including national public-sector funds from the Netherlands and Sweden and two Ohio employee funds, have asked that the Texas teachers fund be named lead plaintiff.
TRS Spokesman Howard Goldman said that the aim is to improve corporate governance at Bank of America, but that the “TRS hopes to obtain the best financial recovery possible for the harmed investors.”
The California Public Employees Retirement System and the California State Teachers Retirement System also filed for lead plaintiff status in the suit which will be tried in the U.S. District Court for the Southern District of New York.
Bank of America shareholders have filed numerous lawsuits against the company over its Merrill Lynch acquisition.
March 20, 2009
A Texas debt adjustment firm has agreed to pay a fine to the Georgia Governor’s Office of Consumer Affairs (OCA) to settle charges that it violated state law.
Under the agreement, Debt Relief USA Inc. will refund $527,205.55 in fees to 330 Georgia residents and pay $40,000 to the state for expenses. It will also cease operations in the state until it practices comply with the Georgia Debt Adjustment Act, according to the OCA.
Georgia regulators alleged that the company fialed to pay its clients’ creditors within 30 days of receipt and did not maintain separate trust accounts and insurance for each customer, as required by the act.
The company also allegedly charged more than 7.5 percent that the law allows debt adjusters to take from the amount customers pay to their creditors each month.
March 5, 2009
The Fort Worth Star-Telegram is reporting that Magna Entertainment Corp., the parent company of Lone Star Park in Grand Prairie, has filed for bankruptcy.
The company made the announcement just as a $40 million debt payment was due. The Chapter 11 case was filed in Delaware.
Magna said that its day-to-day operations would not be interrupted though the Chapter 11 bankruptcy process.
Company officials also stressed that the bankruptcy filing should have little impact on Lone Star or on its upcoming race season, set to begin April 9.
“There should be no immediate implications for Lone Star Park, our employees, horsemen, vendors or customers,” track president and general manager Drew Shubeck is quoted in the Star Telegram. “We are proceeding with business as usual.”
March 4, 2009
The Deal of the Week column in today’s issue of the Wall Street Journal discusses the 18-story One Riverwalk Place in San Antonio.
The building on the northern edge of the city’s famed River Walk was purchased by Equastone LLC in 2006. Its mortgagte is in default, contractors have filed claims against the property for unpaid bills and it has been scheduled for foreclosure auction at least twice. No sale has been recorded on the property, and if the foreclosure were to go through, it would be the largest multi-tennant office building to go back to a lender since the savings and loan crisis of the late 1980s.
With that, and a report from the Federal Reserve Bank in Dallas that predicts the state will lose 300,000 jobs this year and the unemployment rate may rise to 8 percent, it is clear that Texas will not be immune to the economic downturn.
Speaking of ties to a crisis, the construction of the River Walk began in the 1930s as a Works Progress Administration project. The 3.2 mile strip draws thousands of tourists annually to its numerous shops, hotels and restaurants.
February 23, 2009
A U.S. District judge in Houston pleaded guilty Monday to a obstruction of justice and resigned from the bench in a deal that ends prosecutor’s efforts on other charges.
Jury selection was set to begin today for Judge Samuel Kent on the obstruction charge and five felony charges that he sexually abused two court employees.
Kent faces up to 20 years in prison on the obstruction charge, which stemmed from an investigation conducted by a Special Investigative Committee of the 5th Circuit Court that was looking into allegations that he had non-consensual sexual contact with a court employee.
Famed defense attorney Dick DeGuerin spoke to reporters just after the hearing saying “Judge Kent believes that this settlement is in the best interest of all involved.”
DeGuerin said that Kent made the decision because a trial would have been long, embarrassing and difficult for all the parties.
Kent’s decision to retire after pleading guilty will have no effect on his eligibility for retirement benefits. Congress is expected to take action quickly to impeach Kent and get him off the government’s payroll. If they do so, Kent will be the 14 judge impeached by the U.S. House for “high crimes and misdemeanors.”